INTRODUCTION ADITYA BIRLA GROUP OVERVIEW GENESIS: Aditya Aditya Birla Group traces traces its origin back to the tiny village of Pilan Pilanii in the the Raja Rajast stha han n dese desert rt,, wher where, e, late late Shri Shri Seth Seth Shiv Shiv Nara Naraya yan n Bi Birla rla st star arte ted d cotto cotton-t n-tra radi ding ng oper operat ation ions s in 18 1857 57.. Then one visionary – the late Shri G.D Birla set up India’s first integr integrate ated d alumin aluminium ium manufa manufactu cturin ring g unit unit at Renuko Renukoot, ot, in 1962, backed by captive power plant at Renusagar in 1967. It further evolved under the dynamic leadership of the late Shri Aditya Vikram Birla – a prominent figure in the Indian indus industr try, y, unde underr whos whose e st stew ewar ards dship hip Hinda Hindalco lco atta attaine ined d its its leadership position in aluminium. Today our Group chairman, Dr. Dr. Kuma Kumarr Mang Mangla lam m Bi Birl rla a has has put put toge togeth ther er the the buil buildi ding ng blocks to make Indian business a global force.
The Aditya Birla Group is India’s first truly multinational corporation global in vision, rooted in Indian values, A US $24 billion corporation with a market cap of US $31.5 billion and in the the leag league ue of Fort Fortun une e 50 500, 0, the the Adi dity tya a Bi Birrla Grou Group p is anchored by an extraordinary force of 100,000 employees, belonging to 25 different nationalities. In India, the Group has been adjudged “The Best Employer in India and among the top 20 in Asia” by the Hewitt-Economic Times and Wall Street Journal Study 2007. Over 50 per cent of its revenues flow from its overseas operations.
The
group’s
products
and
services,
offer
distinctive
consume consumerr soluti solutions ons.. Its 66 statestate-ofof-thethe-art art manufac manufactur turing ing units and sectoral service span throughout the world. Entry of Syt. Ghanshyam Das Birla 1916 First taste of industrial management – take over of sick cotton mill in Delhi. 1918 -
First limited company – Birla Brothers Limited. The real industrial thrust in 1919 with Birla Jute in Calcutta and 1921.
Jiyajeerao Cotton –
Gwalior Birla Jute was established in defiance of Scottish monopoly. 1923 -
Purchase of Kesoram Cotton.
1926 -
Orient Paper Mills.
193 9311-33 33
-
Bhar Bh arat at Suga Sugar, r, Upper pper Gang Ganges es Suga Sugar, r, New New
Swadeshi Sugar, New Delhi Sugar. By 1947 -
Asset sets wroth Rs. 25 cro crores in 20 com compani nie e s.
Thereafter 1954 - Durgapur Iron & Steel 1957
- Gwalior Rayon, Nagda
1962
- Hindalco co commencement of of pr production
1966
- Take over of Indian Rayon
ADITYA BIRLA GROUP A truly multinational multinational Indian Group The Aditya Birla Group was the first in Indian to venture overseas, by starting a joint venture in Ethiopia. Thereafter, over the last quarter century, this group has started 20 very successful and diversified ventures spread through the Asian region. It has been declared by Euro money that this is the only truly multinational group of India. At present, the group has more than 50 manufacturing units, prod produci ucing ng a diver diverse se range range of produ product cts, s, finan financia ciall serv servic ice, e, trading and computer consultancy. It is also expanding its activitie ities s
in
the
field ield of
tele elecom,
oil
refiner nery,
pow power
generation, copper smelter etc.
Globally the Aditya Birla Group is:
•
A meta metals ls powe powerh rhou ouse se,, amon among g the the worl world’ d’s s most most cost cost-efficient aluminium and copper producers. Hindalco-Novelis from from its its fold is a Fort Fortune une 500 500 compan company. y. It is the
larg largest est
aluminium rolling company. It is one of the three biggest
prod produce ucers rs of prim primar ary y alum alumini inium um in As Asia, ia, with with the the larg larges estt single location copper smelter.
•
No.1 in viscose staple fibre
•
The fourth largest producer of insulators
•
The fourth largest producer of carbon black
•
The 11th largest cement producer globally
•
Among Among the the worl world’ d’s s top top 15 BP BPO O comp compan anies ies and and amon among g India’s top three
•
Among the best energy efficient fertilizer plants
In India: •
A premier branded garments player
•
The second largest player in viscose filament yarn
•
The second largest in the chlor-alkali sector
•
Among the top five mobile telephony companies
•
A leading player in life insurance and asset management
•
Amon Among g the the top top thre three e su supe perm rmar arke kett chai chains ns in the the reta retail il business
Rock solid in fundamentals, the Aditya Birla Group nurtures a culture culture where success does not come in the way of the need to keep learning afresh, to keep experimenting.
Beyond business – “Reaching Out” A valu value e base based, d, cari caring ng corp corpor orat ate e citi citize zen n the the Ad Adit itya ya Bi Birl rla a Grou Group p in inhe here rent ntly ly beli believ eves es in the the trus truste tees eshi hip p conc concep eptt of management. A part of the group’s profits is ploughed back
in to meaningful welfare driven initiative that make a qualitative difference to the lives of marginalized people. These activities are carried out under the aegis of the Aditya Birla
Center
for
community
initiatives
and
Rural
Development spearheaded by Mrs. Rajashree Birla.
Beyond business — the Aditya Birla Group is: •
•
Working in 3,700 villages
•
•
Reaching out to seven million people annually through the Aditya Birla Centre for Community Initiatives and Rural Development, spearheaded by Mrs. Rajashree Birla
•
•
Focusing on: health care, education, sustainable livelihood, infrastructure and espousing social causes
GROUP PHILOSOPHY RESTS ON FOUR PILLARS:
CUSTOMERIZE
PEOPLE- IZE
STRATEGIZE
INSTITUTIONALIZE
GROUP VALUES OUR VALUES ARE NON NEGOTIABLE, THEY ARE NEVER TO BE JETTISONED, FOR US OUR VALUES ARE OUR WELLSPRING. THESE ARE:
INTEGRITY
COMMITMENT
PASSION
SEAMLESSNESS
SPEED
GROUP VISSION “TO BECOME A PREMIUM CONGLOMERATE WITH CLEAR BUSSINESS FOCUS AT EACH CORPORATE LEVEL”
GROUP MISSION “TO DELIVER VALUE FOR OUR CUSTOMERS, SHAREHOLDERS, EMPLOYEES AND SOCIETY AT LARGE”
Aditya Birla Management Corporation Ltd. (ABMCL) In a strategic move to institutionalize its management process, the Aditya Birla Group has set up Aditya Birla Management Corporation Limited (ABMCL) It is headed by Board of Directors with Mr. Kumar Mangalam Birla as a Chairman. It is a Group’s apex decision making body and provides strategic direction to group companies. The Group has following Achievement to its credit The
world’s no.1 in viscose staple fiber.
The
third largest producer of insulator.
The
world’s third largest producer of carbon black.
The
world’s eighth largest producer of cement and the
largest in a single geography.
Asia’s largest integrated aluminum producer.
A globally competitive, fast growing copper producer.
India’s premier branded garments player.
Among India’s most energy efficient private sector fertilizer plants.
India’s second largest producer of viscose filament yarn.
India’s
second
largest
private
sector
insurance
company.
Among the world’s top 15 and India’s top three BPO companies.
The
group has also made successful forays into it and IT
sector and has a significant presence in the Financial Sector and telecommunications sectors in tie-ups with giants like Sun Life insurance (Canada) and At &T (USA) respectively.
HINDALCO INDUSTRY LTD
Hindalco Industries Limited, the metals flagship company of the Aditya Birla Group, is an industry leader in aluminium and copper. A metals powerhouse with a consolidated turnover of Rs.600, 128 million (US$ 15 billion), Hindalco is the world’s largest aluminium rolling company and one of the biggest producers of primary aluminium in Asia. Its copper smelter is the world’s largest custom smelter at a single location.
Established in 1958, Hindalco commissioned its aluminium facility
at
Renukoot
in
Eastern
U.P.
in
1962.
Later
acquisitions and mergers, with Indal, Birla Copper and the Nifty and Mt.Gordon copper mines in Australia, strengthened the company’s position in value-added alumina, aluminium and copper products, with vertical integration through access to captive copper concentrates.
In 2007, the acquisition of Novelis Inc. a world leader in aluminium rolling and can recycling marked a significant milestone in the history of the aluminium industry in India. With Novelis under its fold Hindalco ranks among the global top five aluminium majors, as an integrated producer with low cost alumina and aluminium facilities combined with high-end rolling capabilities and a global footprint in 12 countries outside India. Its combined turnover of US$ 15 billion, places it in the Fortune 500 league.
HINDALCO INDUSTRIES LIMITED COMPANY PROFILE Hindalco Industries Ltd. is the Flagship Company of Aditya Birla Group. The Aditya Birla Group is India’s second largest business house with a turnover of Rs. 280 billion, and Assets are valued at over Rs. 265 billion. The group has nearly 72000 employees in 18 countries. Hindalco Industries Limited was incorporated in 1958 and commercial production commenced in 1962. The Company was set up in technical collaboration with Kaiser Aluminium & Chemicals Corporation, USA. Hindalco is today one of India’s premium corporate, contributing significantly to economic growth, generating employment and setting high standards in respect of fulfilling of obligations to all stakeholders. The Company prizes its ‘Human Capital’, and employees have been reciprocating by turning in a sterling performance for the Company, year after year. Hindalco has an enviable record of harmonious Industrial Relations, with not a single man day lost since the past 30 years on account of industrial strife. Company’s principal products comprise of Aluminium Ingots, Aluminium Billets, Aluminium Wire Rods, Sheet Products, Extrusions, Aluminium Foils and Aluminium Alloy Wheels. The Company’s by products include Gallium Metal, Vanadium Sludge and Aluminium Dross.
Hindalco Industries Limited, one of the major producer of Aluminium metal and its semis in the country as well as a premier flagship company of A.V. Birla group in the biggest industrial enterprise of Uttar Pradesh. It is a public limited company
in
the
private
sector
having
about
39000
shareholders. It is the largest integrated Aluminium plant in India with all its production facilities viz. Alumina, Aluminium & Fabrication located at Renukoot near Rihand Dam in Sonebhadra (Uttar Pradesh). Hindalco’s power division is situated at Renusagar about 35 km from Renukoot. In September 1959, an industrial license was granted by the Government for setting up an integrated Aluminium plant at Renukoot, with an initial installed capacity of 20000 MT. The construction work was completed with 18 months, a record for a major job of this kind. The dream of the great visionary Syt. G.D. Birla to locate an Aluminium plant near Rihand power house came true. The late
Prime
Minister
Pt.
Jawaharlal
Nehru,
formally
inaugurated the plant in January 1963. From the modest beginning in 1962, Hindalco has now become an industrial giant with capacity to produce 242000 MT of Aluminium per annum. Renukoot a fast growing & thriving industrial township, which is now humming with activities & providing all the basic amenities of modern life to the inhabitants. From being one of the most backward areas of U.P., it has now carved a place for itself on the industrial map of India as well as
World. Lying in the foothills of the Vindhya range, Renukoot is about 165 km from Varanasi and 154 km from Mirzapur. The expansion programme of plant from the initial capacity of 242000 MT took place in the stages during the last thirty five years. Apart from catering to the internal demand of Aluminium in
the country,
Hindalco
is
also
exporting
Aluminium semis to various countries including U.S.A., Germany, Japan etc. Renusagar power, a division of Hindalco is the major supplier of power to Hindalco. The power generating
capacity
of
Renusagar
power
division
has
increased to 575 MW since last year. Now Renusagar is able to meet the full requirement of Hindalco. Hindalco is an ISO-9002 company since 1994. Recently in July 1998 it has also received the certification of ISO-14001 for environment maintenance system. The company has been able to continuously enhance the quality and range of the product and provide customer satisfaction. In 1962 when production started, the company had on its roll about 900 staff and workmen and the present strength of employees is about 14000. The office and works site is located at Renukoot and there are zonal offices at Bangalore, Bombay, Delhi and Calcutta. The company is managed by a Board of Director and other Senior Executives.
Management Syt. Kumar Mangalam Birla Syt. Debu Bhatacharya
-
Chairman - Managing Director
COORPOR ATE (RATAN SOMANI)
SMELTER HEAD (Umakant Babulal Agarwal)
ELECTRIC AL HEAD
MECHENI CAL HEAD
POWER HEAD S.v.s Smyanaray an)
TECHNOL OGICAL HEAD
CIVIL HEAD
MEHENIC AL HEAD
MECANIC AL HEAD
TECHNOL OGY HEAD
CIVIL HEAS
Hindalco today Hindalco ranks as one of the largest Aluminium producer in India and contributes about 35% of the total Aluminium production of the country. The company’s fully integrated Aluminium operations consist of the mining of Bauxite, conversion of Bauxite into Alumina, production of primary aluminium from Alumina by electrolysis and production of properzi redraw rods, rolled products and extrusions. Capacities
Present
Power
575
MW
Alumina
4,50,000 MT p.a.
Aluminium
2,42,000 MT p.a.
Rolled products
80,000
MT p.a.
Extrusions
15,000
MT p.a.
Wire rods
50,000
Foils
5,000
MT p.a. MT p.a.
Co-generation
37
MW
Joint venture companies of Hindalco 1. 2. 3. 4. 5. 6. 7. 8. 9.
Indo-Gulf Fertilisers & Chemical Corporation Limited Bihar Caustic & Chemicals Limited Tanfac Industries Limited Mangalore Refinery & Petrochemicals Limited (MRPL) Birla AT & T Communications Limited Bina Power Supply Company Limited Birla Global Finance Limited (BGFL) Birla Capital International AMC Limited (BCIAMC) Rajshree Polyfil Limited
HINDALCO’S VISION To
strengthen
company,
our
sustaining
position
as
domestic
a
premium
leadership
aluminium and
global
competitiveness through innovation, quality and value added growth.
HINDALCO’S MISSION To relentlessly pursue the creation of superior shareholder value
by
exceeding
customer
expectations
profitably,
unleashing employee potential and being a responsible corporate citizen adhering to our values. .
HINDALCO’S STRATEGY
EFFICIENCY FOCUS: To be one of the lowest cost producers globally. EFFECTIVENESS FOCUS: To continue to remain the market leader domestically. GROWTH
FOCUS:
To
purchase
value
adding
growth
opportunities in aluminium.
HUMAN RESOURCE (HR) Human Resources play a vital role in shaping a healthy and growing organization. Without doubt, human
resources
development has hence been aptly described as the “soul” of a vibrant and dynamic organization. The increasing complexity and problems of managing human resources places heavy demands on ensuring equal emphasis on all the sub-systems which play a crucial part in ensuring holistic development of the human resources. Human Resources Management has gained immense importance in today’s environment of global competition to meet future challenges in the new millennium. In these days of rapid advancement in Information Technology and Techno-Commercial aspects of business, it would be eventually the “Man behind the Machine” who would determine which way / direction an organization goes. Human Resources Development systems have an important task in achieving the required dynamics to enable any organization to perform at its peak. The right recruitment and
selection
to
start
with,
progressive
training
and
development thereafter, and, a fair performance appraisal system gives an impetus to professional and proficient management of HR. There is yet another dimension of HRM
which is directly related to, and falls within the ambit of organizational development that deserves major attention because the “character & culture” of an organization is formed by HR of the organization and that will finally decide the future of the organization. After said all this, it is imperative to consolidate on the available human potential and check HR wastages to ensure organizational effectiveness as it has become a key to sustain excellence and achieve competitive advantage over others. thus assumes an even greater relevance in the existing changing business scenario especially so when there is a paradigm shift in the Organizations’ approach towards Human Resources Management in outlining specific roles. Without
defining
organization
HR
vision,
roles
would jeopardize its
&
objectives,
growth
and
an
survival
therefore it is all the more necessary to indigenize the HR sub-systems for one’s own benefit after a close microscopic scrutiny. .
HINDALCO HR VISION, MISSION & OBJECTIVES HR VISION To provide
an
competencies
enabling are
environment
nurtured
and
where
harnessed
sustainable business growth and leadership.
employee towards
HR MISSION To proactively assess and provide for the HR needs of the business and customer for the attainment of organizational goals. HR OBJECTIVES To collaborate with and support internal customer of HR in achieving business objectives through HR services viz. effective manpower planning , ensuring harmonious industrial relation etc. To review and redesign the structure of the organisation with the clarity of roles, responsibilities and accountability for overall organizational effectiveness and speeding response to emerging business challenges. To develop knowledge and skills of the employees and groom leaders with functional and business competencies to meet future demands of the organizational (viz. flexibility and change management). To benchmark best HR practices in order to enhance human resource effectiveness. To enhance employee productivity through rationalization of jobs and manpower optimization. To promote employee involvement in decision-making, team working, creativity and empowerment. To institutionalize transparency by framing, updating and communicating systems and processes. To maintain good liaison with government/ external agencies in order to better serve the organizational cause. To provide a safe and healthy work environment and continuously benchmark and upgrade the standards of safety and hygiene. To work towards improving the quality of work life of employees and the lives of their families. •
•
•
•
•
•
•
•
•
•
HINDALCO INDUSTRIES LIMITED
Organisation Chart of HRD Division V.P. (HR)
Medical services
Head, HRD
Head E.R
Head Security &
HeadSafety
School ( all principles)
Services directly or indirectly end to Customer Satisfaction. Satisfaction is a emotional response to his or her prior experience with and expectations with the benefits provided by the services of service department of the organisation. It is believed that satisfaction will influence future. Customers can experience satisfaction with; • • •
•
Organisation’s services, overall Specific performance aspects of organisation’s services Organisation’s conduct of transaction (delivery of services, repair visits, complaint handling, etc...) The kind of relations between employees and the organisation.
Services can be explained with the help of a following cycle
IMPROVEED EMPLOYEE SATISFACTION
SATISFIED CUSTOMERS
LOWER
LOWER CUSTOMER
EMPLOYEE
CHURN
TURNOVER
HIGHER PROFIT MARGIN
Following model presents the interrelation between customer satisfaction and Loyalty interrelates. This model advises that loyalty to be more of an emotional bond, while satisfaction deals more with functional performance.
Emotional Bonds
Perceived Caring
Trust & Confidence Brand awareness
Customer Loyalty Product Satisfaction
Brand Image
Channel Assets
Perceived Caring
Perceived Knowledge
Accessibility & responsiveness
The management shall review the organisation’s quality management system, at planned Intervals, to ensure its continuing suitability, adequacy and
effectiveness
.this
review shall include assessing opportunities for improvement and the need for changes to the quality policies and quality objectives. The input of management reviews shall include information on:
• • • •
•
Results of audit Customer feedback Process performance Changes that could affect the quality management system Recommendations for improvement
The main objective of the measurement of performance of the Quality Management System. The organisation shall monitor information relating to customer perception as to whether
on
the
organisation
has
met
customer
requirements. Considering
Hindalco
industries
limited,
Renukoot,
emphasises on the benefits of customer satisfaction. The service departments of Hindalco are : • • • • •
Recruitment/ Personnel IT Building Maintenance Accounts Town Admin, Security and Camp Office
INFORMATION TECHNOLOGY For ensuring Quality, Service and Information Security, IT Department has established ITMS based on PDCA model and with the help of integration of ISO9001:2000 (Quality Management ), BS 15000 (IT Service Management) and ISO -27001 (Information Security Management). Hindalco IT Department is World’s 1st integrated implementation of 3rd International IT Standards , which is certified by DNV in Dec 2005. Our main objective is to implement the best practices and continuously improve upon it. The DR solution setup at Renusagar ensure Business application availability in case of disaster , which is an online true replica of Database server at Renukoot, results to zero data loss by implementation of State-of-the-art “Metro Mirror Technology.
Information Security Prerequisites
The deployment and use of information system in the Group are governed by the Information Security Policy of the Group. Upon joining Aditya Birla Group, employees are required to sign
“Information
System
Acceptable
Use
Agreement”
before they can access any of the Group’s Information System.
Access to Information System Employees will be granted access to Information System based on business needs. Users will be assigned a unique identification code (User ID) and password to enable them to gain access to Information System. The IT department regularly monitors and audits the usage of Information System. IT department generally provide services to the employee in the form of following: Setup i.e. Change Calls Bug i.e. Incident Calls Information i.e. Information Calls For solving the employee’s problem/complaint IT Department • • •
has software called Calls Management System (CMS). The IT Department has signed two agreements: • •
Service Level Agreement (SLA) Operation Level Agreement (OLA)
SERVICE LEVEL AGREEMENT (SLA) - This agreement is signed between IT Department and other Departments that the complaints will be solved within the specified period. OPERATION LEVEL AGREEMENT (SLA) - This agreement is signed internally among employees of IT Department that
the particular complaint will be solved within specified period.
BUILDING DEPARTMENT Building Department looks after Colony Maintenance. It includes more than 8000 quarters. Building department has the following functions:
Construction Routine Maintenance Development
CONSTRUCTION Construction include jobs like The job of construction does not exactly deal with the services that are rendered to the employees.
MAINTENANCE Accepts the complaint through: Online Telephone Writing
DEVELOPMENT WORKS Major
maintenance problems Development Works.
are
considered
as
Their job is being identified into following categories:
Painting Carpentry Fabrication Plumbing Massionary
ACCOUNTS
DEPARTMENT
Every organization has some objectives and whether these are achieved or not is also monitored. It is possible when all the transaction evaluated in terms of money and is recorded in a meaningful manner. The process of keeping these records is called “Accounting” and the department that does it is called as “Accounts Department”. The main task of the accounts department is to advise management on the financial matters and maintain accounts prescribed under the companies act. A necessary part of this
function is proper accounting of income and expenses and assets and liabilities. There are many function in the Accounts department i.e. Accounting, Audit, Taxation, PF, Banking, Insurance, Fixed Assets, Cash Receipts Payments, Budgeting etc. The Accounts Department performs their function in the form of service to the employees in the following manners: 1. Gratuity 2. Super Annuation 3. Reimbursement of Bills 4. Insurance 5. Provident Fund 6. Ex-Gratia Payment
CONCLUSION In our project” Purchase Order Procedure in Hindalco Co. Ltd. (Mahan Project)”, We have finalised the service indicators for all the service departments of Hindalco Industries limited. Today is the buyers market. In the world of globalisation, by ensuring merely the customer satisfaction, the organisation can survive but it cannot flourish and compete with the competitors. For that, it is important to move from customer satisfaction to customer delight and ultimately to customer obsession, only then the organisation can rule the market. There are both external and internal customers whose attitudes, opinions and behaviour affect the organisation’s day-to-day success: External customers- external customers exist outside the organisation. This type that comes to mind are “end-use” customers, the ones who use or consume the product or services of the organisation for their own purposes or production. Internal customers- employees of the organisation for whom the
service
departments
provide
product,
services
or
servicing. Stakeholders- are those whose interests are linked with the organisation.
It
includes
employees,
stockholders,
community leaders . If the internal customers are satisfied, then only it is possible to attract and retain the external customers.
Service indicators are basically framed to ensure the satisfaction of internal customers and developing the culture where the organisation can ensure the best
LIMITATIONS:
Based on certain organisation’s restrictions, certain data cannot be revealed to general mass.
Limited time period.
How to Create a Formal Purchasing Program Make sure you're purchasing quality supplies at good prices by formalizing your business's purchasing.
It's easy to neglect the area of purchasing in your business. Of course you buy goods and services, but you don't always plan the purchases as well as you could. As a result, you may spend more money than they need to, buy goods that aren't of the proper quality for your needs, or choose suppliers that don't offer the level of customer service you deserve. If you fail to devote enough attention to your purchasing, your cost of doing business could rise to an unnecessarily high level. As operating expenses increase, profit margins shrink, you would either have to live with lower profits or raise your prices, and neither of these choices is appealing. By keeping your costs under control, you'll be able to keep your prices at competitive levels and maintain a desirable profit.
Purchasing Policies
To purchase wisely, you need to buy the right quality and
quantity of materials or products at the best possible price and at the appropriate time from the best vendor. The purchasing process is much more streamlined in small companies than in larger businesses, especially when the businesses are still fairly new. The owner usually decides what to buy, when to buy, where to buy, and how much to buy. As the business grows, however, the owner may no longer be able to handle this task and will have to delegate it to others. While a small business probably won't need to create an entire purchasing department, it will need to have a purchasing manager. By selecting one person to manage all of the business's purchasing activities, you will decrease the risk of duplicating orders for the same materials. Purchasing need not be the purchasing manager's sole duty; in fact, your business may not do enough purchasing to require a full-time purchasing manager. You should select an employee who can handle purchasing, as well as the other duties he or she my already have. This individual should be able to communicate clearly with your business's suppliers. Although purchasing duties probably won't occupy all of this individual's time, there is more to purchasing than placing orders. The purchasing manager will have to gather orders, make sure they are complete, and stay within any limits the company may have set on spending, select an appropriate vendor, order the goods, check their condition upon receipt, make sure the invoice is correct, and speed payment of the invoice by forwarding it to the accounting department.
Before you delegate the purchasing function to another employee, you should write out a purchasing policy for your business. You may even want to create such a policy while you are still responsible for purchasing, as a guide for yourself. The purchasing policy, according to the SBA, should answer the following questions: •
Who has the authority to purchase items for the company? What items can that person purchase? Are there any spending limitations?
•
What are the business's requirements for adequate supplier competition and what criteria will be used to select possible vendors?
•
What is the company's position on the acceptance of gifts?
•
Which types of contracts can the business enter into with successful bidders or vendors?
•
What is the company's position on conflict of interest and personal loans from suppliers?
•
What kinds of information does the company consider confidential?
•
What is the procedure for dealing with legal questions?
The Ordering System The steps your employees and purchasing manager will follow to request, order, receive and pay for goods and materials make up your ordering system. A good ordering
system will help maintain satisfactory supplier relations, improve cash management, aid in inventory control, and increase the overall profitability of your company.
The Purchase Order Once the purchasing manager has received a requisition, her or she will need to select a supplier and check the price of the items ordered. After agreeing on a price, the purchasing manager will send a purchase order to the supplier. This order is a formal request to the supplier to deliver materials or supplies according to the terms and prices agreed upon. Purchase orders, like requisition forms, can help small businesses keep track of their purchasing activities. Firms can refer to their purchase orders to see if suppliers have shipped the correct goods in the correct quantity. They can also see if suppliers are delivering goods on time. Purchase orders can also serve as support in any legal disputes if they arise between you and the supplier. Although you can write out purchase orders by hand, you would give a better impression if you used standard multipart forms that you can purchase at any stationery store. They should include information such as the type of product or service you are ordering, the quantity desired, price and delivery terms. The orders should also have an area for any additional information. Purchase orders should also include your company name, address, telephone and fax numbers, and logo. You can simply write in this information, stamp this information on your purchase orders with a rubber stamp, or
design and print your own purchase order forms. Purchase orders should have at least three parts: a vendor copy, an internal file copy, and an accounting copy. In addition to the standard purchase order, you might choose to use two other types: blanket purchase orders and annual contracts. If you routinely order fairly inexpensive items from a single vendor, you might want to place a blanket order for those items with the vendor. The blanket order covers specific items to be delivered over a specific period of time, such as six months or one year. This type of purchase order lets you take advantage of quantity discounts and saves you the time and trouble of reordering small items you need often. You will also receive a monthly invoice covering your purchases for a given month, instead of several small invoices covering each individual purchase. Annual contracts cover the purchase of a specific product from a vendor over a period of 12 months. An annual contract will usually let you fix the price for buying a specific quantity of a given item over a year. You can also arrange to have goods delivered as needed, either monthly, weekly, or on another specific schedule.
Receiving Records A packing list will accompany orders you receive. Make sure that the items shipped match the items indicated on the packing list. Inspect all of the items shipped carefully, paying special attention to items that appear damaged. Initial the
packing list to verify receipt and file it in a folder until you receive the invoice for the shipment. In many cases, you won't have to send payment with your order; your suppliers will either include an invoice with the shipment or send the invoice to you separately soon after sending your order. When the invoice arrives, check it against the packing list and the purchase order. Write a check for the appropriate amount, note the check number on a copy of the invoice, and file the invoice and packing list. If you receive any damaged items, or if a vendor sends you items you did not order, let the vendor know as soon as possible. The vendor will tell you the best way to return the items and to receive the ones you actually ordered. Fill out an internal receiving report and distribute it to those who need to know when shipments come in, such as the person in charge of inventory control, the buyer, the employee requisitioning the items, and the person in charge of accounts payable in accounting. Although purchasing is certainly an important task and deserved careful attention, you will not be able to spend the same amount of time on all of your purchases, nor should you. More expensive items, for instance, deserve more careful attention and consideration than less expensive ones. The following four considerations will help you decide what items deserve the most attention, according to the SBA:
1. Unit cost. The SBA recommends that you give more attention to costly items than to less expensive ones. The more money you have tied up in a given type of inventory product, the more attention you need to give to that product in your purchasing, even if you sell few of these expensive items. 2. Extended cost. The SBA points out that some items may have a low cost, but you may buy and sell them in high volume. In this case, you may need to give a higher priority to these items, although their unit cost is fairly low. 3. Lead time. You need to consider the time to allow between ordering an item and receiving it. If a low-cost item has a long lead time, for instance, you would need to make regular checks on its delivery status. In that case, the SBA says, you may need priority. 4. Shipment rejection. If there is a high possibility you will reject an item because of technical problems or deficiencies in quality, the SBA suggests assigning it a high priority.
The Costs of Buying In addition to the cost of goods you buy, you also have to pay and account for the costs of acquiring and carrying inventory. Inventory
acquisition
costs
are
costs
associated
with
generating and processing orders, and include the following:
•
Portions of employee salaries and operating expenses directly pertaining to purchasing, inventory control, receiving, inspection and accounts payable.
•
Costs
of
supplies
such
as
forms,
envelopes
and
stationery. •
Costs of placing orders (telephone, fax, postage, etc.)
Inventory carrying costs usually consist of the following elements: •
Interest charged on your financial investment into inventory.
•
Cost of insurance covering your inventory.
•
Property taxes paid on inventory.
•
Cost of storing inventory.
•
Obsolescence and deterioration of items in inventory.
Buy Wisely Prices for the goods and materials you buy may fluctuate. If you find that the price for a given item is rising, do not buy large quantities of this item thinking that the price will rise even higher if you wait. Instead, the SBA advises that you buy smaller quantities of this item, but buy them more often. You can quickly sell off the items you bought at high prices, instead of tying up money in overpriced inventory. Keep buying small quantities as prices return to their normal level. You will save money on your purchases, as well as reduce demand for the item, "encouraging" prices to drop. Once prices have stabilized at their normal level, you can resume buying in larger quantities.
Discounts Suppliers extend a variety of different discounts to their customers. Many vendors offer quantity discounts: the more units you buy, the less you pay per unity. These discounts can apply to individual purchases or to a specific group of purchases made over time, as you would make under a blanket order. Suppliers also offer seasonal discounts that apply to merchandise being sold out of season. The danger with buying off-season goods is that they may go out of style or become obsolete, and never go back "in-season." Vendors also offer cash discounts that you earn by paying the entire invoice within a specified time period. If you received an invoice with the notation "1/10, Net 30," it would mean that
you could take a one-percent discount from the net amount of the invoice if you paid within ten days. You would otherwise have to pay for the entire amount of the invoice within 30 days.
Dealing With Vendors Once you have compared prices from a group of suppliers, you can then select your vendors. Before you place an order with a vendor, you not only need to compare prices, but you also need to compare credit terms, emphasis on customer service, standing in the industry, and other related factors. If you buy a number of different kinds of products, you may have to use a variety of vendors. If, on the other hand, a single vendor can meet all of your needs at reasonable prices, you may want to give that vendor the bulk of your business. Do not, however, rely solely on this vendor. You should keep in contact with other vendors, and watch for new ones. It's a good idea to be on good terms with more than one supplier. If your primary supplier ever fails to ship goods on time, suspends operations because of some natural
disaster, or starts offering poor service, you will have other sources to use as back-up. By using a few different sources of supply, furthermore, you will build more credit than you would if you used only one. Your primary supplier may also offer you better discounts or otherwise try to win all of your business.
Evaluating Suppliers You not only need to evaluate suppliers before you place an order, but you also need to evaluate their performance constantly. Consider the following points when you evaluate a supplier's performance: •
Timeliness of deliveries
•
Completeness of orders shipped
•
Quality of items shipped
•
Quality of customer service
•
Competitiveness of price
•
Previous performance with similar orders
•
Strength of financial condition
•
Ability to meet design specifications
•
Expertise of sales representatives and technical staff
Locating Suppliers Before you can approach a supplier, you need to know where to find them. You need to be aware of where you can find suppliers both before you begin business and after you have started. Keep looking for new suppliers. To look for suppliers
in your area, search online and consult the Business-toBusiness Yellow Pages and your local Chamber of Commerce. To broaden your search, consult websites, publications and associations pertaining to your industry; these sources should be able to give you a number of leads. Many trade associations and publications publish directories listing suppliers to their industries. If you require industrial or mechanical equipment, consult manufacturers' directories such as the Thomas Register of American Manufacturers. Finally, talk to your employees. They may know of excellent suppliers you might use..
HINDALCO BARGAWAN POWER PLANT (ALUMINIUM)
ACKNOWLEDGEMENT
A Summer Training is a combination of views and ideas and suggestions and contribution of many people. Thus, one of the pleasant parts of the writing. This report is the opportunity to thanks those who contributed toward its fulfillment.
I am thankful to MR. SHAILENDRA SIR (HR MANAGER) for his vital inputs and valuable suggestions and continuous guidance, which have gone a long way in providing necessary impetus to our efforts in consummating this report.
My sincere thanks to his for providing with all the relevant information for completion of my project.
My interaction with Company was immensely pleasurable and it was an honor to have been a small part of this training.
Last, but not the least I am thankful to all my co trainees without whom my time at company would not have been as pleasurable.
AMRITA SHARMA M.B.A. 4TH Sem.
PREFACE
It is well evident that work experience is an indispensable part of every professional course .In the same manner practical training in any organization is must for each and every individual who is undergoing management course.
Without the practical exposure one cannot consider himself or herself as a qualified capable manager. During the training period the student learn through his own experience, the real situation of the corporate world and to put his theoretical knowledge into practice. This experience is very valuable for the student and plays a leading and an important role in the career of the student.
Hence to fulfill this requirement, I had completed my 45 Days in HINDALCO Ltd.
Entering in an organization is like a stepping into altogether a new world. At first everything seems to be strange and unheard but at the same time when the time passes one understands the concepts and working of the organization and thereby developed professional relationship.
Initially, it felt as if classroom study was just theory and have no relation in any concern’s working but gradually it is realized that all the basic fundamental concepts studies are linked in one or the other ways to the organization. But how and what can be done with fundamentals depend upon the intellectual and applicability of the individuals. It is just a matter to modify the theory so as to apply it to the given practical solution.
CERTIFICATE This is to certify that MS. AMRITA SHARMA (4 T H Sem.)
Completed her training and submitted a
project
on
Hindalco
“
Purchase
Order
Procedure
in
Co. Ltd." in partial fulfillment of the
requirement
for
the
degree
Business Administration of U ni ve rs it y S ag ar
of
Master
of
Dr. Hari Singh Gour
w it h hi s t ru ly a nd h on es tl y
observed inferences during his training..
I wish him bright future in his career.
Internal Examiner
External Examiner
Signature of Head of Deptt.
BIBLIOGRAPHY Website: 1.www.google.com 2.www.hindalco.com 3.
en.wikipedia.org/wiki/Renusagar
CONTENTS
•
PREFACE ACKNOWLEDGEMENT
•
CERTIFICATE
•
•
TRAINING CERTIFICATE
CHAPTER NAME NO •
INTRODUCTION ABOUT ADITYA GROUP
PAGE
